Digital Business Model Innovation Research Articles

How to promote the digital business model innovation of high‐tech SMEs through government venture capital? An evolutionary game perspective

AbstractDigital business model innovation plays a crucial role in the growth of high‐tech small and medium‐sized enterprises (SMEs). In this research, we introduced tripartite evolutionary game models that include the government, venture capital (VC) institutions, and high‐tech SMEs, operating within the context of government venture capital. Within the scenarios of government revenue and loss compensation, we assess the evolutionary stable strategies of each stakeholder and analyze variations in the evolution results. Using numerical simulation, we investigate how factors impact players' strategic choices and the evolution of the system. The findings indicate the presence of an indirect transmission mechanism among players' strategic choices, which collaboratively stabilizes the game system. Furthermore, we investigate the policy consequences of various compensation mechanisms and find that high‐tech SMEs' strategic choices are not influenced by these compensation approaches. However, the incentive effects of different compensation on the government and VCs' investment strategies vary. Revenue compensation is more favorable for VC institutions but places a greater financial burden on the government. In contrast, loss compensation is a more efficient approach for the government. This study offers valuable insights for the management and operation of government venture capital funds, and the advancement of digital business model innovation for high‐tech SMEs.

Linking the top management team transactive memory system, strategic flexibility and digital business model innovation: a dynamic capabilities perspective

ABSTRACT This study applies the dynamic capabilities perspective to explore how the top management team transactive memory system affects digital business model innovation through strategic flexibility. It proposes hypotheses regarding the relationships between the top management team transactive memory system, strategic flexibility, and digital business model innovation. Furthermore, it tests these hypotheses using the Structural Equation Model and the Bootstrapping method for the data collected from 205 Chinese firms. The results show that the top management team transactive memory system has a significant positive impact on strategic flexibility and digital business model innovation; the top management team transactive memory system can influence digital business model innovation through strategic flexibility. These findings provide a new dynamic capabilities framework for digital business model innovation from the perspective of top management team cognition and contribute to the literature on digital business model innovation from a dynamic capabilities perspective. They also provide insight into how firms can build dynamic capabilities to promote digital business model innovation.

Examining the Microfoundations for Digital Business Model Innovation of Developing Markets International New Ventures (2023)

Examining the Microfoundations for Digital Business Model Innovation of Developing Markets International New Ventures (2023)

C-Level Managers’ Perspectives on Firms’ Digital Transformation: A Qualitative Analysis Through the Lens of Business Model Innovation

Given a mismatch between traditional paths and the opportunities resulting from new digital technologies, the aim of this paper is to understand why companies’ digital transformation may fail even before it starts. We analyze interviews with 20[Formula: see text]C-level managers from 15 traditional DAX-listed German companies that face digital transformations. Our objective is to integrate the different areas that have been studied in the field of digital transformation. We offer top management teams standpoints, as they concern how business decisions, including digital-transformation decisions, are made. We review the role of top management in digital business model innovation and identify value creation, leadership challenges, and culture development as the main factors that support or hinder business model innovation in a digital world. We further show that taking outside-in perspectives, implementing cross-sectional strategies, and having transformational capabilities represent important drivers on business model innovation. Employees are the most important factor. They should be brought in and guided by top managers to support the digital transformation. The patterns we identify might provide guidance for top managers engaging in digital business model innovation.

Business Model Innovation for Digitalization in the Swedish District Heating Sector

Despite decades of research and development, digitalization remains a key challenge for the Swedish district heating sector. Business model innovation is believed to be necessary to capitalize on digitalization, yet it is especially challenging for municipal companies. This study aims to identify the potential impact of digitalization on the business models of Swedish district heating companies and to analyze the barriers that exist for digital business model innovation. Through case studies of eight municipal district heating companies, this study demonstrates how the entire business model is potentially impacted by digitalization. This study also identifies the barriers to digital business model innovation that are linked to two conflicting views (restrictive versus comprehensive) on digitalization. The restrictive view diminishes the importance of business model innovation, outsourcing innovation to minimize both costs and risks for the company. In contrast, the comprehensive view embraces digital business model innovation through trial-and-error and opens the innovation process to stakeholder influence. These two perspectives are motivated by different beliefs about the need for digitalization to secure future business opportunities, as well as differences in owners’ risk appetite. The implications for industry outlooks and the design of policy support for the digitalization of district heating are discussed.

Institutional Pressures on Sustainability and Green Performance: The Mediating Role of Digital Business Model Innovation

The purpose of this study is to examine the mediating role of digital business model innovation (DBMI) in the relationship between institutional pressures (i.e., regulation and normative pressures) on sustainability and green performance. To verify our hypotheses, we performed the structural equation model as an analytical technique using 396 datasets from firms listed on the China Stock Exchange. The structural results showed that institutional pressures had a positive effect on DBMI, and that DBMI had a significant effect on green performance. The analysis also supports the full mediation role of DBMI between institutional pressures and green performance. We believe that our findings contribute to ongoing knowledge by enriching institutional perspectives on sustainable management and providing managers with practical implications on how to drive DBMI.

Low-Carbon Digital Business Model Innovation: A Renewable Energy Case Study from Thailand

Low-Carbon Digital Business Model Innovation: A Renewable Energy Case Study from Thailand

Digital business model innovation in metaverse: How to approach virtual economy opportunities

In recent times, continuous evolutions in digital technologies are triggering new business models (BMs) within virtual environments. This phenomenon is defining a new economy staging in so-called metaverses. Here, physical-world BMs are modified, virtual-world BMs are implemented, and combinations of physical-world and virtual-world BMs are performed. As a result, new mechanisms of value creation and value capture at the crossroads of physical and virtual economies arise in the metaverse. This paper aims at understanding which are these value mechanisms and how organizations can develop them. To this aim, the paper analyzes the cases of four cross-industry incumbents (namely, Gucci, Samsung, Hyundai, and Nike), which are pivoting their BMs in the metaverse. A framework indicating how to innovate BMs in the metaverse is provided, by looking at both “phygital” transformations (i.e., transformations aimed at joining physical and digital worlds’ realities) and completely virtual immersions shaping firms’ internal processes and relationships with customers. In this way, the paper supports companies in turning the metaverse into value, while also extends the scant academic knowledge on the metaverse’ impact on innovation of BMs.

What Takes the Wind out of Their Sails? A Micro-Foundational Perspective of Challenges for Building Dynamic Capabilities Towards Digital Business Model Innovation

While dynamic capabilities (DCs) are recognized as an important enabler of digital transformation, research lacks knowledge about the underlying challenges and adequate responses of building these capabilities. More specifically, this study aims to shed light into successful digital business model innovation (BMI) by adopting a micro-foundational approach that covers both challenges and successful measures on this path for incumbent industrial firms. Therefore, six case studies building on qualitative empirical research are analyzed that either focus on Internet of Things (IoT)-driven platform BMI or software as a service (SaaS) BMI. The results offer a variety of insights regarding challenges and respective responses. These findings are attributed to DCs and its subdimensions of sensing, seizing and transforming, further revealing the interplay of various factors for specific contexts. Additionally, the study reveals that many challenges and thus required responses are the result of individuals, processes, and structures.

Digital industrial platform development: A peripheral actor's perspective

Breakthrough technologies enabled digital industrial platform ecosystems are shaping the future industries. This study examines the development process of digital industrial platforms led by peripheral industrial actors through the lens of digital business model innovation. Utilizing an exploratory case study of HXB in the chemical fabric industry, we identify three digital business model innovations that contribute to successful digital industrial platform development: industrial transaction platformization, industrial factory digitalization, and digital platform enablement. We develop a framework to elucidate how these innovations facilitate digital industrial platform development and discuss how peripheral actors can overcome legitimacy limitations to deploy these innovations.

The Mediating Effect of IT-Enabled Dynamic Capabilities and Organizational Readiness on the Relationship Between Transformational Leadership and Digital Business Model Innovation: Evidence From Indonesia Incumbent Firms

The outbreak of the coronavirus disease 2019 (COVID-19) has triggered the massive adoption of digital products and services in Indonesia, forcing established organizations to accelerate digital transformation and adaptation of their digital enabled business model to stay relevant. This article investigates how established firms achieve digital business model innovation (DBMI) and the role of transformational leadership (TL) as a key antecedent. Based on the cross-sectional survey data from 124 public listed firms in Indonesia, this study reveals that established firms in the uncertainty’s situation require Transformational Leadership, and TL indirectly influence DBMI through organizational readiness and ITeDC. We also found that despite the direct impact of organizational readiness on DBMI, partial mediation through IteDC can be a plausible mechanism. We contribute to the business model literature by offering a more integrated view of the antecedents concerning established firms’ DBMI.

Article Review: The Evolution Of The Digital Service Ecosystem And Digital Business Model Innovation In Retail - The Emergence Of Meta-Ecosystems And The Value Of Physical Interactions

Title: The evolution of the digital service ecosystem and digital business model innovation in retail: The emergence of meta-ecosystems and the value of physical interactions Authors: M. Palmi, L. Mieh, P. Oghazi, V. Parida and J. Wincent Source: Technological Forecasting & Social Change (Elsevier Inc.) Date of Publication: 19 January 2022 Volume and Issue No: 177 (2022) 121496 ISSN/DOI: https://doi.org/10.1016/j.techfore.2022.121496

Adoption of AI in response to COVID-19-a configurational perspective.

Although the importance of artificial intelligence (AI) has often been highlighted in strategic agility and decision outcomes, whether it helps firms strengthen their competitiveness and the means firms use to achieve such competitiveness are still under-researched. Our research thus joins the recent discussion on digitalization trends and strategic responses to COVID-19 to better understand how firms strengthen their competitiveness during such challenging times. Namely, this study incorporates the strategic responses to COVID-19 into the technology-organization-environment (TOE) framework by investigating the impacts of different configurations of TOE contexts and strategic responses on a firm's competitive advantage. We used fuzzy-set qualitative comparative analysis to investigate how TOE contexts and strategic responses integrate into configurations and impact a firm's competiveness. By applying a configurational approach with data from 514 exporting firms in China, we find a strong indication of the equifinality of different strategies, indicating that multiple strategic paths can be used to respond to crises. The adoption of AI, while important, is not sufficient to enhance a firm's competitiveness. Our results stress the significance of data quality, organizational resources and capabilities, and digital business model innovation for AI adoption. We also identify successful strategic paths of AI adoption aversion and ambidextrous strategies. The findings have practical implications for firms seeking effective strategies to respond to future crises and sustain their competitive advantages.

Digital business model innovation among small and medium‐sized enterprises (SMEs)

AbstractDigital business model innovation (DBMI) has been acknowledged as a new business norm which allows for increased competitiveness. By adopting the dynamic capabilities theory, this research aims to investigate the adoption of DBMI among small and medium‐sized enterprises (SMEs) in a developing country. The qualitative data were collected using semi‐structured virtual interviews with SMEs. The findings revealed that the SMEs have redesigned their DBMI through value creation innovation, which refers to the use of new digital technology, new capability, and strong collaboration with new partners to streamline the business processes. SMEs innovate their value proposition by focusing on new product and service offerings and creating profitable customer relationships. Interestingly, SMEs also implement value delivery innovation, utilizing new delivery channels to target new market segments. In terms of value capture innovation, SMEs are concerned with obtaining new sources of revenues at a lower cost structure. Research studies on DBMI in Malaysia are scarce. The originality of this research lies in the exploration of DBMI in the real‐life business context, and the insights it will provide to SMEs and practitioners in the midst of adopting DBMI. The findings offer valuable insights for SMEs, practitioners, and policymakers in emerging economies.

Pathways to digital business models: The connection of sensing and seizing in business model innovation

Digital business model innovation (BMI) is critical to achieving and sustaining competitiveness in technology-driven environments. In those environments, firms must not only sense changes to identify opportunities but also effectively seize them in BMI. Therefore, sensing and seizing cannot be considered as isolated dynamic capabilities, but must be combined for successful BMI. However, research on sensing and seizing does not offer compelling suggestions for firms that struggle with connecting both while pursuing digital BMI. We use qualitative configurational analysis (QCA) to analyze a sample of 49 case studies on digital BMI to identify the antecedents that firms sense before seizing these changes with digital BMI. Based on ten configurations of sensing (represented by six antecedents) and seizing (represented by four BMI types), we explain the relationship between sensed antecedents and seized digital BMI. In addition, we derived four variables that explain “what” and “how” firms connect sensing and seizing. Based on the sensing-seizing connection, we introduce consolidating BMI as a new type of BMI unique to the digital context. This novel type enables firms to exploit and explore new BMs and subsequent digital BMIs through the means of digital infrastructure. This study extends the understanding of how different business models emerge and how firms create digital BMIs.

Turning Adversity into Action: Resource Allocation Strategies and Digital Innovation in Family Firms

Few external shocks have had as severe an impact on organisations as COVID-19. To date, research on how management can respond to such a far-reaching trigger event is lacking. Due to their economic relevance, family firms, which are typically resource-constrained and rely on idiosyncratic resource allocation behaviour, are of particular interest in this regard. Based on an inductive, multicase study of German family firms and building on rich longitudinal insights from more than 100 semistructured interviews and secondary data, we develop a novel framework explaining how an external shock such as the COVID-19 pandemic can trigger a change in family firms’ motives. Linking certain adapted motives of family firms (i.e., survival, utilisation, and opportunism) with their resource allocation behaviour during the crisis (in terms of resource preservation, resource recombination, and reliance on social boundary resources), we reveal how digital innovation (digital process innovation, digital product innovation, and digital business model innovation) originates as a result of a process of entrepreneurial action.

Digital Transformation Taking Centre Stage: How Is Digital Transformation Reshaping Entrepreneurial Innovation?

The digital transformation has a profound implication for entrepreneurial innovation. In contrast, scholarly attention is mainly towards entre­preneurial innovation in pure digital businesses at the organisational and individual levels. However, our understanding of its implication at a higher level of aggregation, like the regional and national levels, is limited. Drawing on the national systems of innovation, I conceptualise digital transformation as changes in digital institutional and digitally relevant individual factors and examine its implication for digital business model innovation and entrepreneurial innovation at the country level. Using fuzzy-set qualitative comparative analysis for a sample of 55 countries, I explore the causal configurations explaining the implication of digital transformation. The result indicates that digital transformation fuels digital business model innovation in specific and entrepreneurial innovation in general at the country level. This study contributes to understanding the broader implication of digital transformation and extends the boundary condition of the national systems of innovation in the digital context.

Exploring how entrepreneurial orientation improve firm resilience in digital era: findings from sequential mediation and FsQCA

PurposeUnder extensive pressure from normal market competition, frequent technological change and extreme exogenous shock, firms are facing severe challenge nowadays. How to withstand discontinuous crises and respond to normal risks through improving resilience (RE) is an important question worth researching. Thus, drawing on the strategic entrepreneurship theory, the purpose of this study is exploring the relationship between entrepreneurial orientation (EO) and RE, and combining digitization to discuss the role of digital business capability (DBC), digital business model innovation (DBMI) and environmental hostility (EH).Design/methodology/approachBased on survey data from 203 Chinese firms, using the methods of linear regression and bootstrap to test our hypothesis. Furthermore, fuzzy-set qualitative comparative analysis (FsQCA) is used to identify previously unknown combinations which lead to strong/weak RE in digital context.FindingsFirst, EO positively influenced DBC and RE. Second, DBMI promoted RE, DBC and DBMI served as sequential mediators that linked EO and RE. Third, EH positively moderated the effects of EO on RE. Further the study revealed that different configuration of DBMI and dimensions of EO and DBC can explain RE.Originality/valueThe study explains mechanism of RE from perspective of digitization. The conclusion is good for further consolidating strategic entrepreneurship theory, and providing a new frame for firms to build the ability of antifragile.

How organizational readiness for digital innovation shapes digital business model innovation in family businesses

PurposeFamily businesses often lack sufficient knowledge about digital business model innovation digital business model innovation (BMI). This study's purpose was to analyze how and when organizational readiness for digital innovation exerts a positive impact on family businesses' digital BMI. To do so, the authors examined the mediating effect of the familiness learning mechanism and the moderating effect of family involvement on this relationship.Design/methodology/approachA quantitative survey method was used to collect the data for this study. Using a sample of 282 family businesses involved in manufacturing in China, the authors conducted hierarchical regression analyses to evaluate the authors' theoretical model.FindingsThe results of this work demonstrate a positive relationship between organizational readiness for digital innovation and family businesses' digital BMI, and the find that the familiness learning mechanism mediates this relationship. The findings also show that second-generation family involvement in management moderates the direct effect of organizational readiness for digital innovation on the familiness learning mechanism, as well as the indirect effect of organizational readiness for digital innovation on digital BMI via the familiness learning mechanism. Moreover, the results establish that family involvement in ownership moderates the direct effect of the familiness learning mechanism on digital BMI, as well as the indirect effect of organizational readiness for digital innovation on digital BMI via the familiness learning mechanism.Practical implicationsThis study provides practical contributions to the literature on family businesses and to public policy, providing concrete suggestions for fostering digital innovation in family enterprises. This study also enriches our understanding of the unique conditions by which family businesses can successfully implement digital BMI.Originality/valueThis research confirms that organizational readiness for digital innovation is an antecedent of digital BMI. This finding offers a new perspective that helps explain what might lead family businesses to engage in digital BMI. This study also places the familiness learning mechanism into a theoretical framework, which expands the current understanding of how organizational readiness for digital innovation facilitates digital BMI. Moreover, this work provides new insights into the boundary conditions by which organizational readiness for digital innovation affects the digital BMI of family businesses in terms of second-generation family involvement in management and family involvement in ownership.

Organisations’ Resources and External Shocks: Exploring Digital Innovation in Family Firms

ABSTRACT Few external shocks have had as severe an impact on organisations as COVID-19. To date, research on how management can respond to such a trigger event is lacking. Due to their economic relevance, family firms, which are typically resource-constrained and rely on idiosyncratic resource allocation behaviour, are of particular interest in this regard. Based on a multicase study of German family firms and building on longitudinal insights from 112 semistructured interviews, we develop a framework explaining how an external shock such as the COVID-19 pandemic can trigger a change in family firms’ motives. Linking adapted motives of family firms (i.e. survival, utilisation, and opportunism) with their resource allocation behaviour during the crisis (in terms of resource preservation, resource recombination, and social boundary resource development), we reveal how digital innovation (digital process innovation, digital product innovation, and digital business model innovation) originates as a result of a process of entrepreneurial action.